Hot Dog DeFi Crashes

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Hot Dog

The Hot Dog price was heavily inflated and then dropped within hours.

The exchange appears to be down now, though Twitter and Telegram remain.

This is a global/international case not involving a specific country.

About Hot Dog

"HotdogSwap was launched on September 2." "The newly cloned DeFi protocol called Hotdog promised insane returns up to one million percent APY in order to lure liquidity providers. It is yet another doppelganger of the popular token swap and liquidity platform Uniswap, and follows in the footsteps of the recently launched Sushi and Kimchi platforms." "Similar to Sushi, Hotdog allowed liquidity providers to deposit Uniswap liquidity pool tokens to earn HOTDOG tokens which would entitle users to continue to earn a portion of the protocol's fee, accumulated in the token, even if liquidity provision was withdrawn."

"In the two years since its launch, Uniswap has solidified its position as one of the mainstays in DeFi. Along with that, their protocol design has become a standard in and of itself, one in which many projects have come to derive its mechanics from. With that, we have designed HOTDOGSWAP as the next step forward in the Uniswap protocol design: an evolution. Taking Uniswap's elegant core design, we've added community-oriented features that we believe help improve the design of the protocol, as well as provide further benefits to the actors involved."

"DeFi traders that flock to these new insanely high yield offering projects are known as degenerate farmers or ‘degens’. They drive token prices up initially which also pushes up the yields. Cashing out quickly, as appears to have been the case with Hotdog, nets a big profit for a few while the rest get burnt. Many compare the projects to ponzi schemes, or pump and dumps."

"The HotdogSwap is a new DeFi project that only existed from September 2." "The data from Uniswap.info, the analytics dashboard of the leading DEX, pointed out that Hotdog token skyrocketed to over $5,000 in price." "$4000 to $1 in 5 minutes." "HotdogSwap has seen its token nosedive in a matter of five minutes."

"They create a market for the token on Uniswap —anyone can list any token on this permissionless DEX, by providing the token and ETH. By controlling the supply of ETH relative to the token, they’re also able to set an inflated price for a highly illiquid token."

"HOTDOG tokens skyrocketed to as high as $6,000 in just a few hours, according to charts on Uniswap.info. It appears that the early adopters then sold off after the dump, which induced an epic dump smashing the token back to a dollar in just an hour." "Currently, the token is valued at $0.0176 according to Uniswap."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Hot Dog DeFi Crashes

Date	Event	Description
September 2nd, 2020	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $118,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

As far as we can tell, no assets were lost in the platform. The issue was primarily that investors were paying exorbitant prices for what most regulators would consider to be a security, since the token value essentially depended on the efforts of the particular (though in this case anonymous) individual(s) running this platform.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.